WASHINGTON Congress seems increasingly reluctant to let taxes go up, even on wealthier Americans.
Worried about the fragile economy and their own elections, a growing number of Democrats are joining the Republican opposition to President Barack Obama's plans to let some of the Bush administration's tax cuts expire.
Democratic leaders in Congress still back Obama, but the willingness to raise taxes is waning among the rank and file as the stagnant economy threatens the party's majority in the House and Senate.
"In my view, this is no time to do anything that could be jarring to a fragile recovery," said Rep. Gerry Connolly of Virginia, a first-term Democrat.
The most sweeping tax cuts in a generation are due to expire in January. That's setting up a showdown when lawmakers return from their summer break this month. By waiting to act on the tax cuts until just before congressional elections in November, Democratic leaders have raised the stakes, politically and for taxpayers.
If Congress fails to act - a possibility given the gridlock that has gripped the Senate - workers at every income level would face significant tax increases next year.
Obama wants to make the tax cuts permanent for middle- and low-income families while allowing them to expire for individuals making more than $200,000 and married couples making more than $250,000.
Republicans want to make all the tax cuts permanent, adding nearly $4 trillion to the national debt over the next decade. Most Democrats in Congress support Obama's plan, but a growing number have come out in favor of extending all the reductions for a year or two, leaving the outcome very much in doubt.
"It's going to be hard to resist a one-year extension for everybody, given the state of the economy," said Clint Stretch, a tax expert at the consulting firm Deloitte Tax. "That's where I think the ball is moving."
The tax cuts were enacted in 2001 and 2003 under President George W. Bush. They provided help for both rich and poor, reducing the lowest marginal rates as well as the top ones and several in between. They also provided a wide range of income tax breaks for education, families with children and married couples.
Taxes on capital gains and dividends were reduced, while the federal estate tax was gradually repealed, though only through this year.
Connolly said the nation cannot afford to make all the tax cuts permanent, which would add about $3.9 trillion to the national debt over the next decade according to updated estimates from the nonpartisan Congressional Budget Office.
"I would say certainly a year, until we feel more confident about the economic growth of this economy," he said.
Another freshman Democrat, Rep. Bobby Bright of Alabama, said he would like to see all the tax cuts extended for two or three years, if lawmakers cannot agree on a more permanent plan.
"Party leaders are not my directors or my boss," Bright said. "My boss is my constituents, and I've heard from a vast majority of my constituents that they don't believe in tax increases on anybody at this point in time."
Bright is high on the re-election endangered list, one of roughly four dozen Democrats in districts won by Republican presidential nominee John McCain in 2008.
In the Senate, where Democrats need unity and at least one Republican vote to overcome filibusters, at least three Democrats and independent Joe Lieberman of Connecticut have said they want to extend all the tax cuts temporarily.
Obama first staked out his position on taxes during the presidential campaign, and his administration has been adamant that the nation cannot afford to extend the reductions for top earners.
The president's plan is less expensive than extending all the tax cuts, but it would still add more than $3 trillion to the national debt over the next decade, including the cost of an annual fix that spares the middle class from being hit with the Alternative Minimum Tax.
More Information
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If tax cuts dating from the Bush administration are allowed to expire, then in 2011:
Taxpayers making between $40,000 and $50,000 a year would see an average income tax increase of $923 next year.
Taxpayers making between $50,000 and $75,000 would see an average increase of $1,126.
Taxpayers making between $200,000 and $500,000 would see an average increase of $532.
Taxpayers making from $500,000 to $1 million would see an average increase of a little more than $9,800.
Taxpayers making more than $1 million would see an average increase of just over $95,000. Associated Press







